TAX NEWS - June 2010

Treasury's Geithner Supports Federal Fuel Tax Exemption for School Buses

Small school buses might have received the support they needed to fend off congressional attempts to remove them from the list of vehicles that are eligible for IRS exemptions from paying the fuel excise tax.

Earlier this month, Treasury Secretary Timothy Geithner sent a letter to a number of Congressional Members that outlines his support of the federal fuel tax exemption for school buses, which has come under scrutiny over the past couple of years as the federal highway fund has teetered on the point of insolvency.

Geithner's letter says that school bus operators should continue to receive IRS protection from paying fuel excise taxes for all school bus sizes and models. NSTA members met with House Ways and Means staff and multiple New York Congressional Members in April during the association's annual spring board meeting and lobbying visit to Capitol Hill to express their concern over an issue with the IRS in New York earlier this year on the application of the school bus fuel tax exemption for small school buses. After the meeting, four New York House members and one New York senator forwarded a letter to Geithner asking for clarification on the matter.

NSTA reported this week that Geithner's letter "promised that the IRS would be issuing new guidance on the matter soon and promised to address the concern with IRS Commissioner Douglas Shulman." NSTA added that it forwarded Geithner's letter to House Ways and Means staff, and the association is seeking a meeting with Treasury tax policy staff to ensure the guidance is clear.

At this writing, STN had requested a copy of Geithner's letter from the House Ways and Means committee but had yet to receive it.